Lets talk first about Employee Retention Credit Refundable Vs Nonrefundable :
Our team here what do these guys doing everybody in this space is helping teach individuals about ERC and uh constantly offer a gorgeous breakfast and have individuals actually learn about the program we need to head to the room where we have the ability to show a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I suggest you understand if you just start to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I suggest think about how many actual clients that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they in fact receive the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their bank account and they can genuinely trust Wonder trust that the process has actually been ended up and how many you believe you’ve processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you require you need specialists on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re speaking about something really essential today the staff member retention credit which most of you have actually never ever become aware of I definitely had not heard of it until really just recently and discovered a lot about it since this is probably the most affordable expense of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call your bank supervisor and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund okay go on sorry I simply have to ensure we got that point I indicate that’s a big difference a loan versus money money I like cash cash that’s what we’re speaking about fine and the other loans are done so we’re sitting here in 2023 and the eidl is over the PPP is over and the only one left from the initial cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual had to be an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have actually owned a business but it’s based on you having W-2 workers in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part cash just how much can you return per worker that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because the turmoil of the pandemic so they wished to even get more to keep those staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial certainly now the huge question is why does no one understand about this due to the fact that look when I initially found out about this when I initially satisfied Josh you understand I have actually got great deals of investments in lots of companies I’m a major advocate for entrepreneurship in America and make numerous lots of investments in business owners of which numerous suffered through the pandemic when I first heard about this I called BS I do not believe it because I use the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them wisely to survive during the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t learn about it I imply that’s how you know that’s how false information is that there’s no details out there then a bunch of individuals informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody learn about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was chaos since remember in the initial cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it in the past do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accountant’s never done this prior to unless you have an account that entered into this service and bottom line my firm Kevin has actually stayed in business given that 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate clients have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, employer whose organization is completely or partly suspended.
decrease by more than 50%.
1. The credit is available to all companies despite size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of certifying wages varies by whether a company had, typically, basically than.
100 workers in 2019.
Companies that concentrate on ERC filing help normally offer expertise and assistance to assist companies browse the complex process of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Refundable Vs Nonrefundable
Eligibility Evaluation: These business will examine your business’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can assist identify if you satisfy the requirements for the credit and recognize the optimum credit amount you can declare.
Paperwork and Calculation: ERC filing services will help in gathering the essential paperwork, such as payroll records and financial statements, to support your claim. They will also help determine the credit quantity based upon eligible salaries and other qualifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to recognize possible opportunities for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the required forms and paperwork on your behalf. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have actually evolved over time. These business remain updated with the latest changes and guarantee that your filings abide by the most existing standards. If the IRS requests extra details or performs an audit related to your ERC claim, they can also provide continuous support.
It’s important to research study and veterinarian any company using ERC filing support to guarantee their reliability and knowledge. Try to find established firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax experts who provide ERC filing assistance.
Keep in mind that while these companies can supply important support, it’s always a great idea to have a standard understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage businesses to retain and pay their employees during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, companies need to fulfill one of two criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As pointed out previously, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of qualified incomes paid to workers, including certain health insurance expenditures. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they received a PPP loan. The same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, enabling eligible companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides an opportunity for organizations to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, typically Form 941. The excess can be refunded to the company if the credit exceeds the quantity of work taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have developed in time. The best course of action is to consult with a tax professional or visit the official internal revenue service website for the most in-depth and up-to-date info concerning the ERC, including any current legal modifications or updates.
To get approved for the ERC, a company needs to meet among the following requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, federal government entities and services that got a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC includes completing the essential forms and including the credit on your employment income tax return (usually Kind 941). The exact time it takes to process the credit can vary based upon numerous factors, including the intricacy of your organization and the workload of the internal revenue service. It’s suggested to speak with a tax professional for assistance particular to your scenario.
There are several companies that can help with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll provider. Some popular companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and contact these business directly to ask about their services and charges.
Please note that the details provided here is based on basic knowledge and may not reflect the most recent updates or changes to the ERC. It is essential to talk to a tax expert or go to the main internal revenue service website for the most precise and current info concerning eligibility, declaring procedures, and available help.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on earnings paid to all staff members whether they in fact worked or not. In other words, even if the.
employees worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
allowed only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply money payments however also a part of the cost of company.
provided healthcare. Employee Retention Credit Refundable Vs Nonrefundable
Companies can be immediately reimbursed for the credit by decreasing the amount of payroll taxes they.